So much for the legal fireworks.
C l a s s – a c t i o n attorneys blasted members of the Marsh family last summer, charging in a federal lawsuit that they ran Marsh
Supermarkets “as their private fiefdom despite its public ownership.”
The suit-which accused the executives and directors who then ran the Fishersbased grocer of self-dealing and breach
of fiduciary duty-has petered out.
After a federal judge in late February rejected the attorneys’ request that the case be transferred to state court, where they presumably thought plaintiffs had a better chance of winning, they dropped their case.
Attorneys on both sides of the case declined to comment or did not return calls.
That’s not the only high-profile suit Marsh Supermarkets has cleared off its plate in recent weeks.
In late March, it reached a settlement with the company’s former vice president of community relations, Jodi Marsh, who charged in a lawsuit last September that
she was owed more than $720,000 in severance. Terms were not disclosed.
Jodi Marsh, who left Marsh in January 2006 and now runs her own public relations business, could not be reached.
In court papers, Jodi Marsh said that after she filed for divorce from thencompany President David Marsh in 2005, she went from “having executive officer status” to “almost clerical status.”
The settlement leaves just one big Marsh lawsuit remaining, and it will be a doozy if it ever goes to trial.
In that case, filed last September,
David Marsh charged that his dismissal in February 2006 should have triggered annual severance payments of $738,000 for three years, about $34,000 a year more than he was receiving.
It seemed like a run-ofthe-mill tussle over money until the company fired back late last year, alleging that Marsh had used $500,000 in company
money for personal expenses, including family trips to Africa and New Zealand.
Citing the spending, the company has taken the position that David Marsh’s firing was “for cause,” wiping out its severance obligations and entitling it to recoup damages.
“Now that Marsh Supermarkets has been sold and a new CEO has taken over, the company has discovered that Mr. Marsh had, for several years, apparently used Marsh Supermarkets … as his personal checkbook,” court papers filed early this year charge.
In a separate filing, David Marsh denies wrongdoing.
None of the individuals named in any of the Marsh Supermarkets suits are still connected with the company. After Floridabased Sun Capital Partners purchased the company last October for $325 million in cash and assumed debt, it installed new top management and replaced the board.
Sun takes shine to Finish Line
Sun Capital Partners’ principals fashion themselves as retail wizards of sorts.
They have a long history of creating value at retailers they buy, from the Bruegger’s bagel chain to the mail order gift firm Miles Kimball Co.
As Sun wrote in a letter to Marsh last spring, “Sun’s track record as a private equity firm focused on operational turnarounds is second to none, particularly in the retail sector.”
Which leads to this intriguing fact: Sun in March disclosed that it had scooped up 5.1 percent of Finish Line Inc., the struggling Indianapolis-based retailer of athletic shoes and apparel.
What does Sun have up its sleeve? It’s not clear, since Sun brass did not return calls, and the company offered no insight in its Securities and Exchange Commission filing disclosing the stake. In the filing, Sun said it bought most of its 2.4 million shares in the first three months of the year.
It might be just a passive investor, of course. But Sun wouldn’t be the first private equity firm to nudge the retailer toward a sale. Last September, New York-based Clinton Group said in a letter to Finish Line that if its stock price didn’t increase, the company should hire an adviser to explore taking it private or selling it outright.
Sato to the rescue
Finish Line has brought in a retail heavyweight to help get the company’s performance back on track.
Sam Sato, a 22-year veteran of Nordstrom Inc., last month joined the company as executive vice president and chief merchandise officer.
Sato will report to Glenn Lyon, who has handled chief merchandise officer duties since joining Finish Line as executive vice president in 2001. He became president two years later.
Sato most recently served as Nordstrom vice president and corporate merchandise manager.